During a discussion at the Pagosa Springs Town Hall yesterday, members of the Town Tourism Committee board met with Pagosa Springs Town Manager David Mitchem to signal the intent to continue pursuing state money for proposed infrastructure development.

In last week’s edition of The SUN it was reported that the Pagosa Springs Town Council provided Mitchem direction to pursue “grant” money offered by the state through the Colorado Regional Tourism Act. In fact, “grant” is how Mitchem presented the program to council at the June 7 meeting.

However, there is no grant money in the RTA program; the program is designed to direct sales-tax revenue generated directly from new projects to developers in order to help pay off construction bonds. As such, the program is a form of Tax Increment Financing (TIF).

At yesterday’s meeting, Mitchem told TTC board members (as he explained how state money would fund projects) that the program was a TIF and not a grant funded program.

Offered by the state Office for Economic Development and International Trade, the program would set a base sales tax for the area where the project would be built (a so-called Regional Tourism Zone) and then would allow developers to keep any increase in sales tax that comes in over 30 years.

To qualify for the RTA program, municipalities must demonstrate that any proposed project would generate new sales tax revenue with a significant portion of that revenue generated from out-of-state sources.

At the June 7 meeting, council directed Mitchem to create a list of projects that might meet RTA requirements. In turn, Mitchem directed TTC coordinator Jennie Green to coordinate various town and county proposals for projects that would be appropriate for the RTA program.

Having identified the RTA program as a TIF, it was apparent that Mitchem’s focus had shifted during yesterday’s meeting.

“With the right combination of features, we could significantly increase tourism,” Mitchem said, pointing out that proposed fishing and whitewater features in the downtown stretch of the San Juan River would draw a specific kind of tourist to the area.

Mitchem added, “We need to hone our focus, selecting the right combination of features to leverage out-of-state visitors. These are a whole new market segment that we’re going after.”

The list of proposed projects that could make the list for the RTA application includes: Reservoir Hill infrastructure (improved road, water, sewer, electrical); recreational amenities on Reservoir Hill (including an amphitheater, zipline, observation tower, alpine coaster, chairlift); completion of river features for additional fish habitat and recreation; completion of the River Walk Trail; ice skating pavilion; Town-to-Lakes Trail; downtown hotel/hot springs facility; wayfinding and signage plan; downtown river promenade; exposition center at the county fairgrounds; and the proposed Geothermal Greenhouse Project.

Mitchem furthermore acknowledged the need for up-front financing for all the projects — a matter that did not arise during the June 7 discussion.

“The challenge is, how much money can be borrowed ... that’s the limiting factor,” Mitchem said.

“We need to talk to potential lenders in the next week or so,” he added.

Mitchem also acknowledged that, in order to meet the burden for RTA sales tax rebates, tourism in the area would need to increase by more than 50 percent.

“That would require building a brand new downtown hotel to increase tourism by that much,” Mitchem said.

At the end of the meeting, Mitchem conceded that meeting the RTA application deadline could be tricky and might not succeed. The issue with the latter is that one requirement for the RTA program is for the applicant to submit an estimated $25,000 to pay for a third-party assessment of the application — money that is not refundable.

“The worst thing that could happen to us is that we have a capital improvement plan for tourism,” Mitchem said.